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French leaseback
properties provide holiday accommodation in the most
popular regions of France. The French leaseback
scheme is a government initiative to encourage and
promote both investment and tourism in France.
It is a national scheme overseen by the French
minister of tourism and offers the assurance of
government regulated contracts and financially bonded
developers.
French leaseback properties offer an excellent scheme
for some investors. The leaseback scheme provides the
security of knowing that your property is in the
hands of a reputable holiday management
company. The management company is engaged in a
long term lease contract to let and maintain your
property. The upkeep of your leaseback property is
paramount to the success of their business, so they
can attract customers and rent the property as often
and as much as possible within the terms of the
contract.
The incentive of the 19.6% VAT refund is a real
benefit, as often the VAT is pre-financed by the
developer, meaning an immediate saving for the buyer
on the property purchase price. In addition,
furniture packs are VAT free. French mortgages are
available on leaseback properties up to 80%.
A leaseback scheme can run for a maximum of 20 years,
but there is a degree of flexibility. The initial
contract is for between 9 and 11 years, and once this
period is over, you can choose to sell the property
or renew the contract for a further 11 or 9 years up
to 20 years in total. You can also choose to sell the
property mid contract to another investor providing
they take over the leaseback contract with the
holiday company.
Once the leaseback contract has come to the end of
its term, you have a property which has been kept in
top condition in a popular location and which has
achieved good capital appreciation. If you
decide to sell before the end of 20 years, you may
have to refund a proportion of the VAT to the French
government, but, with inflation currently low in
France, this will be a relatively small amount to
pay.
As many people have limited holidays, it can be ideal
to know that you have a few weeks of personal use of
the leaseback property and that you will return to
the property to find it clean and ready to occupy.
Location and professional property management are the
key to the success of a leaseback development in
France. Once these conditions are met, the
French leaseback scheme offers the assurance of a
sound long term investment.
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